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Lawsuit May Affect Mahindra Pick-up's Fate in US

By Motortrend India Staff   |   17 June,2010

Mahindra & Mahindra has landed itself in legal soup even before its Pick-up trucks could enter the US market. Global Vehicles has filed a lawsuit against M&M complaining about unnecessary delay in the launch even though it made all the investments for the distribution infrastructure.

In the lawsuit, Global Vehicles has mentioned that it has spent close to $35 million and has also signed 360 dealers nationwide. Also included in this is an initial distribution appointment fee of $8.5 million. The company also claims that it has spent an additional $60 million to buy franchisee fees for the right to sell M&M’s vehicles.

Mahindra has said that it would contest the claims. “We have learnt that Global Vehicles has filed a lawsuit in the US, while also initiating separate arbitration proceedings. Mahindra firmly believes these legal actions to be without merit and will vigorously contest these actions,” the company said.

M&M has said that it remains firm on its decision to launch the pick-up by the end of the year. Global Vehicles has requested the court to prevent M&M from selling its vehicles through any other dealer. M&M officials refused to reveal whether they would be looking for a separate distributor.

“We wanted to give the best product to the American consumer and thereby wanted to be absolutely sure on parameters before its launch,” Goenka had said. The pick-up truck has been built on the platform of its flagship Scorpio SUV.

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